Half of charities failing to beat the downturn

CHARITIES today warned they will have to cut back services with more than half already struggling because of the recession.

About 52 per cent of charities in England and Wales say they have been affected by the credit crunch, up from 38 per cent when similar research was carried out in September last year, according to the Charity Commission.

Nearly two thirds of charities with an annual income of more than £1million said they were concerned the economic problems would impact on their work.

The survey of more than 1,000 charities found one in three has taken steps to try to combat the impact, with 14 per reducing costs, 11 per cent increasing fundraising and six per cent drawing on reserves. About five per cent said they were holding off from offering new services, while two per cent had cut staff numbers.

But only three per cent said they had considered collaborating with another charity, and the same proportion had thought about merging.

Dame Suzi Leather, chairwoman of the Charity Commission, said: "Clearly the impact of the financial downturn on charities is widening and deepening.

"Some still face that double whammy of a drop in income as well as an increased demand for services. It is very surprising that more charities are not considering collaboration."